Arehada Mining (AHD-T) is getting ready to resume operations by mid-March at its zinc-lead-silver underground mine in Inner Mongolia, thanks to a cushy deal from a Chinese bank.
The company says its subsidiary, Arehada China, has worked out a deal with the Agricultural Bank of China to delay payment due dates for each of its three loans.
Arehada says that it won’t have to make interest payments until it generates some extra cash flow from operations after covering its operational needs.
And once the company generates surplus cash flow, it will then have to start repaying the principal.
Araheda says it has two short term bank loans, amounting to RMB 40,000 or about $7.4 million. The short term loans were originally due on Feb. 21 and Feb. 26.
The company also owes RMB 20 million, or about $3.7 million, on a five-year loan that was due on Feb. 26.
The mine was put on care and maintenance in November because of low zinc and lead prices. Arehada says it’s now able to restart production because metals prices have improved. Zinc was around US50 per lb. in November and around the same price today. Lead has not improved much either. It fell from US60 per lb. in November to below US40 by the end of December and has since recovered to nearly US50 per lb.
The mine was first opened in 2006 and was operating at a rate of 1,500 tonnes per day. The company says its zinc processing plant, which also produces sulphuric acid, will not be restarted yet.
Arehada reports that the mine has indicated resources of 5.3 million tonnes grading 2.12% lead, 3.02% zinc and 63.8 grams silver per tonne.
Inferred resources stand at 5.8 million tonnes grading 2.03% lead, 3.12% zinc and 52.08 grams silver per tonne.
Be the first to comment on "Arehada extends loan payments with Chinese bank"